A man washes his hands at a facility outside the Green Pharmacy, Area 8, in Abuja, Nigeria, September 1, 2014. REUTERS/Afolabi Sotunde

LAGOS, April 23 (Thomson Reuters Foundation) - Hassan Abdullahi lugged his handcart loaded with six jerry cans of water up the slope to God's Grace Calabar Kitchen. It was 8 a.m. and this was his third trip from a private water tap to his major customer.

Abdullahi supplies all the water to the restaurant and three homes on the street, delivering 1,000 gallons each day.

It is back-breaking work for Abdullahi and a small army of water carriers pulling carts over pot-holed streets and the allies of Lagos to serve water to millions in Africa's biggest urban area.

For although Lagos state with 20 million people is surrounded by water, getting water fit to drink or for sanitation is a struggle as efforts to improve supplies have failed.

But with no agreement on whether the solution lies in private management or the public sector, there is no immediate solution in sight and public anger is mounting at the impasse, keeping water vendors like Abdullahi busy.

"It's good business because we all need water," said Abdullahi, a recent migrant to Lagos. "I make about N5,000($25) a day. I fetch the water from a house where I pay N500($2.50)."

Nigeria, which has one of the highest child death rates from water-borne diseases in Africa, has sought international development help to finance new water treatment plants and expand its distribution networks.

It hired the World Bank's investment arm, the International Finance Corp. (IFC) in 1999 to advise on upgrades and held talks again last year but nothing has yet improved water supplies.

Water rights activists, labour unions and environmentalists blame the failure on the corruption that permeates so much of Nigeria, which ranks in the bottom 30 percent on Transparency International's Corruption Perception Index.

World Bank President Jim Yong Kim, following the global financial crisis, has made a renewed push to meet the world's $50 trillion in infrastructure needs by 2030 through public-private partnerships (PPP), in which a private party signs a long-term contract with a government to provide services.

Kim and G20 leaders promote these partnerships as a way to attract capital and bring business discipline to the public sector. Private sector participation in water projects in developing nations has grown threefold in the last decade, according to a G20 report.

But in Lagos, these partnerships have brought activists onto the streets, protesting this is tantamount to privatising a crucial public resource, could force layoffs to boost profits, fuel corruption and make water prohibitively expensive.

"PPPs would only lead to increases in tariff without corresponding increase in supply," said Idowu Adelakun, state chairman of the Nigerian Labour Congress.

BROKEN PROMISES

In Lagos, there is a trail of broken promises over private sector investment in faltering public utilities, activists say.

When the Lagos Water Corp (LWC) contracted four companies to improve revenue collection paying them N40,000 ($199) a month to do so, water revenues dropped to N35 million from N70 million, said Adelakun. Once agency staff resumed the work, revenues returned to 60 million and are climbing, he said.

Akinbode Oluwafemi, head of Environmental Rights Action/Friends of the Earth Nigeria, said privatising the Power Holding Company of Nigeria led to a surge in electricity bills and done little to solve the city's erratic power supplies.

PPPs have a mixed track record on water projects. A World Bank infrastructure database shows out of $75 billion invested in PPP water and sewer projects since 1990, 27 percent have been cancelled or are troubled, far more than for other sectors. These are for all PPPs, not only IFC-World Bank projects.

Transnational Institute, a Netherlands-based research group, expects the global trend of privatising water to end. In the last 15 years, more than 180 cities and communities in 35 countries have taken back control of water services due to disappointing levels of investment and tariff hikes, it said in a November report.

No one disputes Lagos badly needs capital investment. Lagos Water Corp. can only produce 210 million gallons a day at full capacity, less than half the state's daily needs of 540 million gallons. By 2020, demand is seen rising to 733 million gallons.

And this is only part of the story. Damaged pipes leak millions of gallons of treated water, about one quarter of the supplies meant for homes, schools, hospitals and industry.

Homes with water pipes are the lucky ones. Up to 90 percent of Lagosians depend on private boreholes or on water vendors.

A plan by LWC to set up seven regional water schemes developed as a PPP sparked protests although the water authority was adamant it would not sell its water assets completely.

LWC Managing Director Shayo Holloway said in an interview that a PPP was a "veritable strategy" to accelerate infrastructure development by attracting private investment.

But water rights activists see this as privatisation, arguing water is a natural resource and must stay in public hands.

"People suffer for water," says Rita Nwogu, a union activist with the Nigerian Labour Congress. "If they privatise it, it might even get worse." (Editing by Stella Dawson and Belinda Goldsmith)